Atul Ltd Annual Report 2016-17

Atul Ltd | Annual Report 2016-17

(

cr)

Note 16 Other equity

As at

March 31, 2017

As at

March 31, 2016

a) Securities premium reserve

34.66

b) General reserve

97.36

c) Retained earnings

Balance as at the beginning of the year

1,156.81

911.97

Add: Profit for the year

322.97

274.18

Remeasurement gain | (loss) on defined benefit plans

1.58

(1.92)

Transfer to retained earnings on disposal of FVOCI equity instruments

0.75

–

Dividends paid (including dividend distribution tax)

(37.02)

(26.81)

Non-controlling interests on acquisition of subsidiary company

(18.30)

(0.61)

Balance as at the end of the year

1,426.79

1,156.81

d) Other reserves

i) FVOCI equity instruments

Balance as at the beginning of the year

287.52

325.89

Add: Equity Instruments through Other Comprehensive Income (FVOCI)

77.36

(38.37)

Less: Transfer to retained earnings on disposal of FVOCI equity

instruments

(0.75)

–

Balance as at the end of the year

364.13

287.52

ii) Effective portion of Cash Flow Hedges

Balance as at the beginning of the year

(0.59)

(0.28)

Add: Effective portion of gain | (loss) on cash flow hedges

(0.73)

(0.90)

Add: Deferred tax liability

0.25

0.31

Less: Hedging gain | (loss) reclassified to Consolidated Statement of

Profit and Loss

0.59

0.28

Balance as at the end of the year

(0.48)

(0.59)

iii) Exchange difference in translating the Financial Statements of a foreign

operation

Balance as at the beginning of the year

9.35

–

Add: Changes in foreign currency translation reserve

4.45

9.35

Balance as at the end of the year

13.80

9.35

1,936.26

1,585.11

Nature and purpose of other reserves

a) Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the

provisions of the Companies Act, 2013.

b) FVOCI - Equity investments

The Group has elected to recognise changes in the fair value of certain investments in equity securities in Other

Comprehensive Income. These changes are accumulated within the FVOCI equity investments reserve within equity. The

Group transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

c) Cash flow hedging reserve

The Group uses hedging instruments as part of its management of foreign currency risk associated with its highly probable

forecast sale and inventory purchases and interest rate risk associated with variable interest rate borrowings. For hedging

foreign currency risk, the Group uses foreign currency forward contracts, foreign currency option contracts and interest rate

swaps. They are designated as cash flows hedges. To the extent these hedges are effective; the change in fair value of the

hedging instrument is recognised in the cash flows hedging reserve. Amounts recognised in the cash flows hedging reserve

is reclassified to profit or loss when the hedged item affects profit or loss (for example, sales and interest payments). When

the forecast transaction results in the recognition of a non-financial asset (for example, inventory), the amount recognised in

the cash flows hedging reserve is adjusted against the carrying amount of the non-financial asset.

d) Foreign currency translation reserve

Exchange differences arising on translation of the foreign operations are recognised in Other Comprehensive Income

as described in Accounting Policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified

to profit or loss when the net investment is disposed-off.

Notes

to the Consolidated Financial Statements